Collision Repairers Favor State Regulation of Insurance, Says SCRS Legislative Committee Chair - BodyShop Business
Connect with us

Uncategorized

Close Sidebar Panel Open Sidebar Panel

Uncategorized

Collision Repairers Favor State Regulation of Insurance, Says SCRS Legislative Committee Chair

Advertisement

Most collision repairers are in favor of keeping state regulation of insurance over federal regulation, primarily due to the enormous resources it would take to lobby at the federal level. This came from Rollie Benjamin, CEO of ABRA Auto Body & Glass and chairman of the legislative committee of the Society of Collision Repair Specialists (SCRS), who participated in a debate on the federal regulation of insurance at the Collision Industry Conference held July 29 in Washington, D.C.

Click Here to Read More
Advertisement

“[Repairers] would be no match for insurers, who are the No. 2 spenders on Capitol Hill,” Benjamin said. He pointed out that while the SCRS and the Alliance of Automotive Service Providers are against federal regulation of insurance, the Automotive Service Association is for it.

The federal regulation of insurance has been a hot topic lately due to the intense scrutiny insurers have been subjected to after the financial meltdown on Wall Street. Those in favor of federal regulation believe it’s necessary due to the “systemic risk” insurance companies pose to the stock market, e.g. insuring risky financial products. But Tom Lichen, lobbyist for the Property Casualty Insurers Association of America (PCI), argues that property and casualty insurers are a different animal and shouldn’t be lumped in with, for example, life insurers, which are in an inherently more risky business.

Advertisement

“Our position is that property and casualty isn’t that risky. Property and casualty insurers aren’t in a position to bring the economy down,” Lichen said. “The opportunity to create unintended consequences by throwing property and casualty into federal regulation is great.”

Lichen stated that he believes some sort of federal regulation of insurance is inevitable within the next 10 years, but it’s going to take some time.

“An optional federal charter has been around for three Congresses and has not advanced,” he said. “Congressmen were glad to leave complaints from consumers about insurance behind at the state level before they were elected nationally. They are not eager to revisit those complaints.”

Advertisement

In a poll conducted on www.bodyshopbusiness.com, 69 percent of respondents said they were in favor of insurance being federally regulated, while 31 percent said they were not. Those in favor generally believe that federal regulation of insurance would result in more intense scrutiny of insurance business practices and might initiate reform if those practices were deemed unethical or illegal.

The repeal of the McCarran-Ferguson Act was also brought up in the debate, with Lichen stating that the law is necessary because it provides for a level playing field among small insurers and large insurers.

Advertisement

“Our rates are set in certain states, and we are heavily regulated,” Lichen said. “We share loss-cost data and need a broader database to base underwriting. This is allowed for under the McCarran-Ferguson Act. Without this Act, small insurers would have to raise premiums because they wouldn’t have access to as much loss-cost data necessary to set rates. The bottom line is that [collision repairers] and [insurers] serve the same customer. I wish we didn’t have this adversarial stuff.”

Moderator Steve Regan, executive director of the Massachusetts Auto Body Association, noted that the Auto Body Association of Connecticut is conducting a petition drive to bring awareness to the 1963 Consent Decree and that 47 states have signed it and it is ready to move on (click HERE to read story). The SCRS has also sent a letter to U.S attorneys general addressing the 1963 Consect Decree (click HERE to read story).

Advertisement

Advertisement
Click to comment
Connect
BodyShop Business